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Negative Externalities and Real Asset Prices: Closing of Stapleton Airport and Effect on Nearby Housing Markets

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Abstract

The closing of a busy airport has large effects on noise and economic activity. We examine the effects of Stapleton airport?s closing on nearby, Denver housing markets. We find evidence of immediate anticipatory effects on prices upon announcement of the closing, but no price changes at closing likely because it was widely anticipated. However, we find that high income and white households delayed moving into these locations until after the airport?s closing. Also, developers upgraded the quality of houses being built after closing. Further, post-closing, these demographic and housing stock changes had substantial effects on housing prices.

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  • Jeffrey P. Cohen & Cletus C. Coughlin & Jonas C. Crews & Stephen L. Ross, 2019. "Negative Externalities and Real Asset Prices: Closing of Stapleton Airport and Effect on Nearby Housing Markets," Working Papers 2019-27, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlwp:2019-027
    DOI: 10.20955/wp.2019.027
    Note: 2020-01-08 Formally withdrawn from the Federal Reserve Bank of St. Louis Working Paper Series and replaced with new version: The Closing of a Major Airport: Immediate and Longer-Term Housing Market Effects. See Related Works.
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    More about this item

    Keywords

    airport noise; housing prices; airport closing; anticipatory effects; dynamic price effects;
    All these keywords.

    JEL classification:

    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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